Shunfeng PV says more on USD-492m deal to buy Wuxi Suntech
Nov 1, 2013 - Shunfeng Photovoltaic International Ltd (HKG:1165) today revealed details on its agreement to buy all of Wuxi Suntech Power Holdings, the principal unit of Suntech Power Holdings Co Ltd (NYSE:STP) in China, for CNY 3 billion (USD 492m/EUR 365m).
After a competitive bidding process, Chinese solar products maker Shunfeng PV was chosen as the potential buyer of the heavily indebted Suntech subsidiary that has been in administration since March 20, 2013. On October 24 the company inked a deal to acquire 100% in Wuxi Suntech. Apart from the CNY 3 billion consideration, Shunfeng PV will also guarantee a USD-25-million (EUR 18.5m) payment by Wuxi Suntech to Chinese state-owned enterprise Wuxi Guolian Development (Group) Co in three months following the buy’s wrap-up.
Now that Wuxi Suntech’s sale has been agreed with the target firm’s administrator, the deal needs to be approved by the shareholders. The firm’s restructuring plan also needs the green light by Wuxi Intermediate People’s Court, Shunfeng PV noted.
The buyer explained that the CNY 3 billion to be paid for the Suntech subsidiary will go to cover bankruptcy costs, Wuxi Suntech’s debts that were set out in the restructuring plan, and certain debts recorded in the management accounts of the firm. Shunfeng will also bear all Wuxi Suntech losses for the seven-plus months it was under reorganisation.
China-based Shunfeng makes solar cells, wafers and modules and also recently started developing solar projects. It explained that the possible acquisition corresponded to its growth strategy. Buying Wuxi Suntech is expected to further improve Shunfeng’s photovoltaic (PV) product manufacturing capabilities and create synergies for its downstream expansion.